Business Hilights
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Is it Boko Haram or poor planning that frustrated N/East oil search?


Even at the peak of the war in Libya and Iraq, several oil exploration activities were going on. In Mosul, the key theater of war in Syria today, serious oil activities are still ongoing.

These businesses are still ongoing because upon the inherent risk, hydrocarbons are in confirmed commercial quantity and there is a synergy between security operatives and industrial operators.

The question on the issue of oil search halt in the North East after just one successful hit by enemies brings to mind, how security intelligence, associated information management and the reality of what is being searched for are juxtaposed for seamless productivity at the heart of the theater of war.

Managing development programmes in a war zone is not only costly, but demands the zenith of trust, coordination and synergies of purposes.

Analysts argue however, that if available studies, in the first instance had indicated that the Nigerian end of the Chad Basin has little potential for commercial oil deposits and would require huge expenditure in addition to security challenges in the zone, why was the directive not well managed be experts within the corridors of powers until it consumed human resources?

The death of 48 people, including five lecturers of University of Maiduguri (UNIMAID), about 15 soldiers, 11 members of the Civilian Joint Task Force and consultants from the Nigerian National Petroleum Corporation (NNPC), Integrated Data Services Limited (IDSL), a subsidiary of NNPC on Frontier Exploration Services/Surface Geochemistry Sampling team, penultimate Thursday on their way to Barno Yasu in the Magumeri Local Government Area of Borno State, has raised fresh dust not just among oil and gas stakeholders, but mainly within the security circle.

Within the oil and gas sector, analysts say the best thing to do is to continue the search but with restructured security system so that the finite natural resource can be explored before the globe dumps hydrocarbon usage which several signals have been emerging.

Besides, a section sees the search as not economic as available data show not so much of commercially viable quantity after all.

Business Hilights recalls that the sudden and so welcomed resumption of oil search in the Chad Basin is sequel to the directive by President Muhammadu Buhari, to the NNPC to continue its oil search in the Chad Basin and other parts of the North East.

This is unfortunately coming at a time, the Federal Government had burnt a whopping N27 billion and $340 million in the three decades of search for oil in the region without commensurate result.

A report released even before the presidential directive had shown that in an era of low crude oil prices, international oil companies would be very unwilling to commit resources to drill in the North, particularly as prospects of commercial finds look largely slim.

The report averred further that “While there are about 37 billion barrels of proven oil reserves and about 187 trillion standard cubic feet of gas in the South South of Nigeria, what we want to explore in the North is an unproven reserve of about 2.3 billion barrels of oil reserves and about 14.65 trillion standard cubic feet of natural gas available for four or more countries in the Chad Basin”.

“If you do the cost benefit analysis, you can see that it is not viable in the short and medium term,” said Henry Boise, Petroleum Economics, Management and Policy Researcher at Emerald Institute for Petroleum and Energy Economics, Policy Strategy, University of Port Harcourt.

Analysts had continued to advice that the country should suspend further deployment of the nation’s resources to the Chad Basin, explaining that Exxonmobil was one of the early IOCs that moved into the Chad Basin but came out without getting the required result.

The issue is that if all the past analysis conducted in that region had proved to be economically unviable till date, what new technology is actually in use that supported the presidential directive on oil and gas search in the Chad Basin”

If there is none, can’t those that ought to have advised the presidency to discard the directive be brought to book, rather than only suspending the search based on human and material losses?